Oct 7 (Reuters) – Levi Strauss raised its annual profit forecast on Wednesday, after benefiting from tariff refunds, as it bets on strong holiday demand for its premium denim.
The company’s shares fell 1.3% in extended trading, reversing a brief 7% jump after the results.
Here are more details:
• The apparel brand received $79 million in refunds during the third quarter ended August 30 for tariffs paid under the International Emergency Economic Powers Act and plans to redeploy about $60 million this year on promotions
• Comparable sales for its direct-to-consumer business were flat in the third quarter. CEO Michelle Gass said the business fell short of expectations with sales falling in the US as shoppers contended with higher inflation
• Still, the jeans maker’s women’s line emerged as a bright spot, driven by demand for baggy jeans and a push beyond denim into tops, skirts and dresses
• The direct-to-consumer performance this quarter was softer than expected, independent retail consultant Bruce Winder said, adding that the US market remains challenging due to elevated fuel prices
• Levi’s raised its outlook for annual organic revenue growth to 6%, the upper end of its previous forecast of 5.5% to 6%
• It raised its forecast for full-year adjusted earnings to $1.54 to $1.56 per share, from $1.46 to $1.52 per share previously
• Net revenue for the quarter ended August 30 rose 4% to $1.61 billion, largely in line with estimates of $1.62 billion, according to data compiled by LSEG
• It earned 48 cents per share on an adjusted basis in the quarter, compared with analysts’ estimate of about 36 cents per share
(Reporting by Angela Christy in Bengaluru and Danielle Kaye in New York; Editing by Diti Pujara)
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